U.S. Export Promotion

The Park Chung-hee administration started in 1965 a meeting on export promotion and expansion attended by economy ministers and business leaders, saying exports are the only way to prop up Korea. Hosted by President Park, the meeting was held every month for almost 15 years until Park was assassinated on Oct. 26, 1979. At the meeting, participants investigated export trends by month, item and region, discussed measures to increase exports, and made decisions. The talks were held in December as a national event to celebrate Korea’s annual economic growth. Park also commended those contributing to export growth.

Along with the Saemaeul (New Community) Movement, the export meeting was considered one of Park’s most successful economic and social policies. The government assessed corporate performance by the amount of exports in dollar denomination and provided all kinds of support such as funding and medals to successful companies and entrepreneurs. Encouraged by the incentives, industrial leaders strived to explore and open up global markets. Occasionally export promotion policy resulted in moral hazard and politico-business collusion. It did, however, significantly affect Korea and its people in a positive way.

U.S. President Barack Obama announced Thursday that he would form the Export Promotion Cabinet participated by agencies in charge of exports and the Export Council, a presidential advisory committee on international trade. He said the U.S. should compete against other nations in exports and that Washington will support U.S. exports. He also urged China to appreciate its currency, saying Beijing will contribute to addressing global imbalances if it moves toward market-friendly foreign exchange rates. By doing so, the Obama administration, which promised to create two million jobs by doubling U.S. exports in five years, is apparently accelerating its export drive.

The U.S. trade deficit was 711.6 billion dollars in 2007 and 695.9 billion dollars in 2008. Though its imports sharply decreased due to the global economic crisis last year, the U.S. trade deficit was 380.7 billion dollars for the year. The snowballing trade deficit and the U.S. fiscal deficit have been called “twin deficits” and fueled uncertainty over the U.S. economy. Washington’s efforts to boost exports will make a positive impact not only on its own economy but also on the global economy. Its export promotion policy, however, will probably ignite trade disputes with Asian nations, especially China. Given the possibility of trade disputes, Korea should prepare itself for potential challenges.

Editorial Writer Kwon Sun-hwal (shkwon@donga.com)